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| The regulator of Fannie Mae and Freddie Mac has confirmed to MortgageDaily.com that it is exploring solutions to the shortage of warehouse line-of-credit financing.Mortgage bankers have been struggling to locate financing for rising originations.
Contributing to the problem was the March 12 closing of National City Corp.’s warehouse lending unit by parent The PNC Financial Services Group. In addition, JPMorgan Chase & Co. exited from warehouse lending last month. Diminished availability forced NetMore America Inc. to scale back its refinance fundings to maintain enough warehouse capacity for its purchase business. But other firms weren’t so lucky — with several recently closing because they lost credit lines. Recent Warehouse Casualties:
The situation has gotten so bleak that the Mortgage Bankers Association sent its President and Chief Executive Officer John A. Courson to Capitol Hill last month to plead for help from lawmakers. The lack of warehouse financing has caught the attention of the Federal Housing Finance Agency. In addition to Fannie and Freddie, the FHFA regulates the Federal Home Loan Banks. “FHFA is aware of the decline in warehouse funding and the negative effect that it is having on mortgage rates and funding availability,” a spokeswoman said in a statement to MortgageDaily.com. She indicated that the agency has already met with a number of industry participants to explore the issue. She said the FHFA is working with the other parties to develop a solution. |
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